Procurement mechanisms and systems

Options for vaccine procurement

There are different options of procurement mechanisms that can be used by countries to procure their vaccines. Countries that opt for self-procurement assume full ownership and responsibility of the procurement process, using either public or private entities. Alternatively, countries can choose to delegate the procurement of their vaccines to mechanisms such as PAHO Revolving Fund, for countries and territories of the Americas, or UNICEF Supply Division and benefit from the advantages of these large procurement pools. Another option would be to collaborate with other countries to build their own pooled procurement mechanism.

Direct procurement

Countries that opt for self procurement purchase vaccines directly from manufacturers using their own resources and their own procurement mechanisms. These countries are not required to wait for WHO recommendations or prequalification, although most rely on WHO guidance and prequalification before implementing a new vaccine. Self-procurement allows countries to customize procedures to meet their own individual needs, laws, rules and regulations.

There are three primary methods of self-procurement. Each method affects the prices that can be achieved.

Competitive bidding

Competitive bidding is appropriate for countries purchasing large volumes of vaccines where multiple supply sources of equal quality are available. This procurement method encourages lowest possible prices while diminishing bias in the award of supply contracts. The most preferred method for the competitive procurement of vaccines is Limited International Bidding (LIB), also referred to as restricted bidding or selective tender. LIB includes a direct invitation to bid, on clearly defined mandatory and/or flexible terms and conditions exclusively directed to selected international and local suppliers of equal quality vaccines.

Request for Quotation

Request for Quotation (RFQ) is appropriate for countries purchasing relatively small volumes and/or in situations with a limited supplier base for specific products or urgent need. RFQ is typically directed to three or four selected suppliers of pre-qualified vaccines, usually under restricted mandatory terms of supply. Negotiation may be required on the final price and contract terms.

Sole-source procurement

Sole-source procurement may be used in monopoly situations that require direct negotiations with one supplier. This method typically results in higher vaccine prices than through a competitive bidding process. Sole-source procurement is considered appropriate under very specific and restricted circumstances.